Meta4 Capital, a Miami-based Web3 focused investment management firm, was the recipient of one of Genesis Global Capital's first wholly NFT-backed loans, valued at $6 million. This loan is significant not just for its size but also because it only used nonfungible tokens (NFTs) as collateral rather than broader liquid collateral. Meta4 is an Andreessen Horowitz-backed NFT VC specializing in acquiring rare and historically significant NFTs.
The funds from Genesis' loan were used to complete Meta4's purchase of three NFTs from Sotheby's Metaverse "Natively Digital" October NFT auction: the $3.4 million record-setting gold Bored Ape Yacht Club #8817, the $3.6 million Rare Pepe PEPENOPOULOS, and a $1.5 million NFT from Fingerprint DAO's Mitchell F. Chan. These acquisitions served as a bridge to Meta4's Series B round, which closed on Dec. 1 for an unknown amount. Each item procured was split proportionally among all Meta4 investors.
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According to Meta4 Capital's CEO and co-founder Brandon Buchanan in an interview with CoinTelegraph, he said: "We're able to financially engineer returns above the interest rate for our investors by purchasing additional NFTs or earning yield through DeFi protocols, and we're able to put NFTs that would otherwise be essentially static to work." Buchanan also voiced his "excitement" at the prospect of working with Genesis. This brokerage delivers "credibility" and value to NFTs and NFT-backed financing.
Roshun Patel, Genesis' VP of Institutional Lending, confirmed to Cointelegraph that the company is currently taking "blue chip" NFTs. "We're looking for the most liquid NFTs with the highest individual value." Only a few CryptoPunks and Bored Apes, as well as a few Pak and Nouns NFTs, currently fit within that group," he stated.
Crypto native firms and protocols are spearheading NFT as unique collateral. The loan between Genesis and Meta4 Capital will help the NFT asset class build its financial offerings for institutional investors.